CORPORATEPOWERSOFLOCALGOVERNMENT

RABUCOVSVILLEGAS
RA3120isconstitutionalandisamanifestationofthelegislaturesrighttodealwiththestatepropertywhich
includesthoseheldbymunicipalcorporationsinitspublicorgovernmentalcapacity.
FACTS:
RA3120convertedtheMalatearea,whicharereservedascommunalproperty,intodisposableoralienable
landsofthestatetobeplacedundertheadministrationanddisposaloftheLTAforsubdivisionsintosmalllots
tothetenantsorbonafideoccupantsthereof.
RespondentcityofficialscontendedthattheActmustbestrickendownasunconstitutionalfordeprivingthe
CityofManilaofthelotsinquestion,andprovidingfortheirsalewithoutpaymentofjustcompensationthus
constitutingdeprivationofpropertywithoutdueprocessoflaw.
HELD:
Thelotsinquestionaremanifestlyownedbythecityinitspublicandgovernmentalcapacityandaretherefore
publicpropertyoverwhichCongresshadabsolutecontrolasdistinguishedfrompatrimonialpropertyownedby
itinitsprivateorproprietarycapacityofwhichitcouldnotbedeprivedwithoutdueprocessandwithoutjust
compensation.TheActwasintendedtoimplementthesocialjusticepolicyoftheconstiandthegovernments
programoflandforthelandless.Itisamanifestationofthelegislaturesrightandpowertodealwiththestate
property which includes those held by municipal corporation in its public and governmental capacity.
Therefore,RA3120isconstitutional.

PHILIPPINEFISHERIESDEVELOPMENTAUTHORITYvs.THEHONORABLECOURTOFAPPEALS
[G.R.No.150301,October2,2007]
FACTS:
ThecontroversyarosewhenrespondentMunicipalityofNavotasassessedtherealestatetaxesallegedlydue
frompetitionerPhilippineFisheriesDevelopmentAuthority(PFDA)fortheperiod19811990onproperties
underitsjurisdiction,managementandoperationlocatedinsidetheNavotasFishingPortComplex(NFPC).
ThemunicipalitythroughMunicipalTreasurerFloranteM.BarredogivenoticetopetitionerthattheNFPCwill
besoldatpublicauctioninorderthatthemunicipalitywillbeabletocollectonpetitionersdelinquentrealty
taxes.
PetitionersoughtthedefermentoftheauctionsaleclaimingthattheNFPCisownedbytheRepublicofthe
Philippines,andpursuanttoPresidentialDecree(P.D.)No.977,it(PFDA)isnotataxableentity.
RespondentMunicipality,ontheotherhand,insistedthat:1)therealpropertieswithinNFPCareownedentirely
bypetitionerwhich,despitetheopportunitygiven,hadfailedtosubmitprooftotheMunicipalAssessorthatthe
propertiesareindeedownedbytheRepublicofthePhilippines;2)ifthepropertiesinquestionreallybelongto
thegovernment,thenthecomplaintshouldhavebeeninstitutedinthenameoftheRepublicofthePhilippines,
representedbytheOfficeoftheSolicitorGeneral;and3)thecomplaintisfatallydefectivebecauseofnon
compliancewithaconditionprecedent,whichis,paymentofthedisputedtaxassessmentunderprotest.
ISSUE:
WONPFDAisliabletopayrealpropertytaxes
RULING:
Localgovernmentunits,pursuanttothefiscalautonomygrantedbytheprovisionsofRepublicActNo.7160or
the1991Local
GovernmentCode,canimposerealty taxesonjuridical persons19subjecttothelimitations enumeratedin
Section133oftheCode:
SEC.133.CommonLimitationsontheTaxingPowerofLocalGovernmentUnits.Unlessotherwiseprovided
herein,theexerciseofthetaxingpowersofprovinces,cities,municipalities,andbarangaysshallnotextendto
thelevyofthefollowing:
...
(o)taxes,fees,chargesofanykindonthenationalgovernment,itsagenciesandinstrumentalities,andlocal
governmentunits.
Nonetheless,theaboveexemptiondoesnotapplywhenthebeneficialuseofthegovernmentpropertyhasbeen
grantedtoataxableperson.Section234(a)oftheCodestatesthatrealpropertyownedbytheRepublicofthe
Philippinesoranyofitspoliticalsubdivisionsisexemptedfrompaymentoftherealpropertytax"exceptwhen
thebeneficialusethereofhasbeengranted,forconsiderationorotherwise,toataxableperson."
Thus,asarule,petitionerPFDA,beinganinstrumentalityofthenationalgovernment,isexemptfromreal
propertytaxbuttheexemptiondoesnotextendtotheportionsoftheNFPCthatwereleasedtotaxableor
privatepersonsandentitiesfortheirbeneficialuse.
Additionally,theNFPCcannotbesoldatpublicauctioninsatisfactionofthetaxdelinquencyassessmentsmade
bytheMunicipalityofNavotasontheentirecomplexforthefollowingreasons:
NFPCisapropertyofpublicdominionandcannotthereforebesoldatpublicauction.Article420oftheCivil
Codeprovides:
ARTICLE420.Thefollowingthingsarepropertyofpublicdominion:
(1)Thoseintendedforpublicuse,suchasroads,canals,rivers,torrents,portsandbridgesconstructedbythe
State,banks,shores,roadsteads,andothersofsimilarcharacter;
(2)ThosewhichbelongtotheState,withoutbeingforpublicuse,andareintendedforsomepublicserviceor

forthedevelopmentofnationalwealth.
ThelandonwhichtheNFPCpropertysitsisareclaimedland,whichbelongstotheState.InChavezv.Public
EstatesAuthoritytheCourtdeclaredthatreclaimedlandsarelandsofthepublicdomainandcannot,without
Congressionalfiat,besubjectofasale,publicorprivate.

THEMUNICIPALITYOFHAGONOY,BULACANvs.HON.SIMEONP.DUMDUM,JR
[G.R.No.168289,March22,2010]
FACTS:
ThecasestemsfromaComplaintfiledbyhereinprivaterespondentEmilyRoseGoKoLimChaoagainst
hereinpetitioners,theMunicipalityofHagonoy,Bulacananditschiefexecutive,FelixV.Ople(Ople)for
collectionofasumofmoneyanddamages.Itwasallegedthatsometimeinthemiddleoftheyear2000,
respondent,doingbusinessasKDSurplusandassuchengagedinbuyingandsellingsurplustrucks,heavy
equipment, machinery, spareparts andrelated supplies,was contacted bypetitioner Ople.Respondenthad
enteredintoanagreementwithpetitionermunicipalitythroughOpleforthedeliveryofmotorvehicles,which
supposedlywereneededtocarryoutcertaindevelopmentalundertakingsinthemunicipality.
However,despitehavingmadeseveraldeliveries,OpleallegedlydidnotheedChaosclaimforpaymentandso
thetrialcourtissuedanOrdergrantingChaosprayerforawritofpreliminaryattachment.Thetrialcourtissued
theWritofPreliminaryAttachmentdirectingthesheriff"toattachtheestate,realandpersonalproperties"of
petitioners.
Petitioners also filed a Motion to Dissolve and/or Discharge the Writ of Preliminary Attachment Already
Issued,invokingimmunityofthestatefromsuit,unenforceabilityofthecontract,andfailuretosubstantiatethe
allegationoffraud
ISSUE:
WONthemunicipalityofHagonoyspropertiesmaybeattached
RULING:
Petitioners,advocatinganegativestanceonthisissue,positthatasamunicipalcorporation,theMunicipalityof
Hagonoyisimmunefromsuit,andthatitspropertiesarebylawexemptfromexecutionandgarnishment.
Hence,theysubmitthatnotonlywasthereanerrorcommittedbythetrialcourtindenyingtheirmotionto
dissolvethewritofpreliminaryattachment;theyalsoadvancethatitshouldnothavebeenissuedinthefirst
place.Nevertheless,theybelievethatrespondenthasnotbeenabletosubstantiate herallegations offraud
necessaryfortheissuanceofthewrit.
Privaterespondent(Chao),forherpart,countersthat,contrarytopetitionersclaim,shehasamplydiscussedthe
basisfortheissuanceofthewritofpreliminary attachmentinheraffidavit; andthatpetitionersclaim of
immunity from suit is negated by Section 22 of the Local Government Code, which vests municipal
corporationswiththepowertosueandbesued.
ThegeneralrulespelledoutinSection3,ArticleXVIoftheConstitutionisthatthestateanditspolitical
subdivisionsmaynotbesuedwithouttheirconsent.Otherwiseput,theyareopentosuitbutonlywhenthey
consenttoit.Consentisimpliedwhenthegovernmententersintoabusinesscontract,asitthendescendstothe
leveloftheothercontractingparty;oritmaybeembodiedinageneralorspeciallawsuchasthatfoundin
BookI,TitleI,Chapter2,Section22oftheLocalGovernmentCodeof1991,whichvestslocalgovernment
unitswithcertaincorporatepowersoneofthemisthepowertosueandbesued.
Bethatasitmay,adifferenceliesbetweensuabilityandliability.Wherethesuabilityofthestateisconceded
andbywhichliabilityisascertainedjudicially,thestateisatlibertytodetermineforitselfwhethertosatisfythe
judgmentornot.Executionmaynotissueuponsuchjudgment,becausestatuteswaivingnonsuabilitydonot
authorizetheseizureofpropertytosatisfyjudgmentsrecoveredfromtheaction.Thesestatutesonlyconveyan
implication that the legislature will recognize such judgment as final and make provisions for its full
satisfaction.Thus,whereconsenttobesuedisgivenbygeneralorspeciallaw,theimplicationthereofislimited
onlytotheresultantverdictontheactionbeforeexecutionofthejudgment.
TheuniversalrulethatwheretheStategivesitsconsenttobesuedbyprivatepartieseitherbygeneralorspecial
law,itmaylimitclaimantsaction"onlyuptothecompletionofproceedingsanteriortothestageofexecution"
andthatthepoweroftheCourtsendswhenthejudgmentisrendered,sincegovernmentfundsandproperties
maynotbeseizedunderwritsofexecutionorgarnishmenttosatisfysuchjudgments,isbasedonobvious
considerations of public policy. Disbursements of public funds must be covered by the corresponding

appropriationsasrequiredbylaw.ThefunctionsandpublicservicesrenderedbytheStatecannotbeallowedto
beparalyzedordisruptedbythediversionofpublicfundsfromtheirlegitimateandspecificobjects
TheCourtholdsthatthewritofpreliminaryattachmentmustbedissolvedand,indeed,itmustnothavebeen
issuedintheveryfirstplace.Whilethereismeritinprivaterespondentspositionthatshe,byaffidavit,was
able to substantiate the allegation of fraud in the same way that the fraud attributable to petitioners was
sufficientlyallegedinthecomplaintand,hence,theissuanceofthewritwouldhavebeenjustified.Still,the
writofattachmentinthiscasewouldonlyprovetobeuselessandunnecessaryunderthepremises,sincethe
propertyofthemunicipalitymaynot,intheeventthatrespondentsclaimisvalidated,besubjectedtowritsof
executionandgarnishmentunless,ofcourse,therehasbeenacorrespondingappropriationprovidedbylaw.

MUNICIPALITYOFMAKATIVSCOURTOFAPPEALS
FACTS:
20May1986:ActionforeminentdomainwasfiledbytheCityofMakatiagainstthepropertiesofAdmiral
Finance,HomeBldgSystem,andArceliJo.TheappraisedvalueofthepropertywasP5.3M.
Privaterespondentmovedfortheissuanceofawritofexecution.Thiswasissuedandanoticeofgarnishment
wasserveduponthemanagerofPNBBuendiabranch.However,thesheriffwastoldthataholdcodewas
placedontheaccount.
Makati:Garnishmentmustbelifted!Themannerofpaymentinexpropriationproceedingsshouldbedonein
installments.
TheMunicipalitylaterdiscoveredthatPSBankconsolidateditsownershipoverthepropertyasmortgagee/
purchaser.PSBandprivaterespondententeredintoacompromiseagreementwheretheyagreedtodividethe
compensationduefromtheexpropriationproceedings.
TrialCourt:Approvedthecompromiseandorderedthereleaseofthebalanceoftheappraisedvalueofthe
property.
Makati:Onappeal,allegedthatithastwoaccountswiththePNB:Onefortheexpropriationoftheproperty,
anotherforstatutoryobligationsandotherpurposes.
ISSUE:
WONthefundsinthesecondaccountcanbethesubjectofexecution.
HELD:NO.
Reasons:
ThefundsdepositedinthesecondPNBaccountarepublicfundsandthesettledruleisthatpublicfundsarenot
subjecttolevyandexecution,unlessotherwiseprovidedforbystatute.
AbsentashowingthattheMCofMakatipassedanordinanceappropriatingfromitspublicfundsanamount
correspondingtothebalancedue,lessthesumofP99Tdepositedinthefirstaccount,nolevyunderexecution
maybevalidlyeffectedonthesecondaccount.
Whereamunicipalityfailsorrefuses,withoutjustifiablereason,toeffectpaymentofafinalmoneyjudgment
renderedagainstit,theclaimantmayavailoftheremedyofmandamustocompeltheenactmentandapproval
ofthenecessaryappropriationordinanceanditscorrespondingdisbursement.
Inthiscase,theRTCdecisionisnotdisputedbyMakati.For3yearsnow,thecityenjoyedpossessionanduse
ofthepropertynotwithstandingitsfailuretocomplywithitslegalobligationtopayjustcompensation.

MUNICIPALITY OF PAOAY VS CA
FACTS:
Manaois obtained a judgment against the municipality of Pasay, Ilocos Norte and a writ
of execution against the defendant municipality was issued.
The Sheriff attached and levied upon the following: (1) P1,712.01 in the Municipal
Treasury representing the rental paid by Mr. Demetrio Tabije of a fishery lot belonging to
the defendant municipality;"(2)
About forty fishery lots leased to thirty-five different persons by the Municipality."
26 July 1949: Municipality filed a petition asking for the dissolution of that attachment or
levy of the properties above- mentioned arguing that they are for public use.
1938: The municipal council of Pasay approved a resolution confiscating said six fishery
lots on the ground that a certain Duque failed to comply with the terms of the lease
contract. Municipality awarded the lease of the same lots to Manaois, him being the
highest bidder.
Manaois paid P2,025 as rental for the said lots for the year 1939. However, when
Manaois and his men tried to enter the property in order to exercise his right as lessee
and to catch fish , particularly bangos fry , he found therein Duque and his men who
claimed that he (Duque) was still the lessee, and despite the appeal of Manaois to the
Municipality of Pasay to put him in possession and the efforts of the municipality to oust
Duque, the latter succeeded in continuing in his possession and keeping Manaois and his
men out. Manaois brought an action against the Municipality of Pasay to recover not only
the sum paid by him for the lease of the fishery lots but also damages.
ISSUE:
WON the properties in this case can be subject to attachment and levy.
HELD:
Not all of them.
Properties for public use held by municipal corporations are not subject to levy and
execution. The reason behind this exemption extended to properties for public use, and
public municipal revenues is that they are held in trust for the people.
If it is patrimonial and which is held by a municipality in its proprietary capacity, it is
treated as the private asset of the town and may be levied upon and sold under an
ordinary execution. The same rule applies to municipal funds derived from patrimonial
properties, for instance, it has been held that shares of stock held by a municipal
corporation are subject to execution.
The fishery or municipal waters of the town are not subject to execution. They do not
belong to the municipality. They are property of the State. What Pasay holds is merely a
usufruct or the right to use said municipal waters, granted to it by section 2321 of the
Revised Administrative Code.
It is based merely on a grant, more or less temporary, made by the Legislature. The
Legislature, for reasons it may deem valid or as a matter of public policy, may, at any
time, repeal or modify said section 2321 and revoke this grant to coastal towns and open
these marine waters to the public. Or the Legislature may grant the usufruct or right of
fishery to the provinces concerned so that said provinces may operate or administer
them by leasing them to private parties.

All this only goes to prove that the municipality of Pasay is not holding this usufruct or
right of fishery in a permanent or absolute manner so as to enable it to dispose of it or to
allow it to be taken away from it as its property through execution.
Another reason for this prohibition is that the buyer would only buy the rights of the
municipality. All that he can do is rent out to private individuals the fishery rights over
the lots after public bidding. This, he must do since that is the only right granted by the
legislature. It is anomalous since a private individual would be forced to conduct a public
bidding. It will also deprive Pasay of income.
The right or usufruct of the town of Pasay over its municipal waters, particularly, the
forty odd fishery lots included in the attachment by the Sheriff, is not subject to
execution.
But we hold that the revenue or income coming from the renting of these fishery lots is
certainly subject to execution. It may be profitable, if not necessary, to distinguish this
kind of revenue from that derived from taxes, municipal licenses and market fees are
provided for and imposed by the law, they are intended primarily and exclusively for the
purpose of financing the governmental activities and functions of municipal corporations.
In fact, the real estate taxes collected by a municipality do not all go to it.
In conclusion, we hold that the fishery lots numbering about forty in the municipality of
Pasay, mentioned at the beginning of this decision are not subject to execution.
However, the amount of P1,712.01 in the municipal treasury of Pasay representing the
rental paid by Demetrio Tabije on fishery lots let out by the municipality of Pasay is a
proper subject of levy, and the attachment made thereon by the Sheriff is valid.

QUISUMBING VS GWENDOLYN GARCIA

FACTS:
[G.R. No. 175527, December 8, 2008]
The Commission on Audit (COA) conducted a financial audit on the Province of Cebu for
the period ending December 2004. Its audit team rendered a report, which states:
"Several contracts in the total amount ofP102,092,841.47 were not supported with a
Sangguniang Panlalawigan resolution authorizing the Provincial Governor to enter into a
contract, as required under Section 22 of R.A. No. 7160."2 The audit team then
recommended that the local chief executive must secure a sanggunian resolution
authorizing the former to enter into a contract as provided under the said law.
Garcia argued that the questioned contracts were executed after a public bidding (in
accordance with the procedures under R.A. 9184) in implementation of specific items in
the regular or supplemental appropriation ordinances passed by theSangguniang
Panlalawigan. These ordinances allegedly serve as the authorization required under R.A.
No. 7160, such that the obtention of another authorization becomes not only redundant
but also detrimental to the speedy delivery of basic services.
RTC ruled in favor of Gov. Garcia. Hence this petition.
ISSUE:
Whether the appropriation ordinance referred to in Sec. 346 in relation to Sec. 306 of
R.A. No. 7160 are exceptions to Sec. 22(c) of R.A. 7160.

Section 346. Disbursements of Local Funds and

Statement of Accounts. - Disbursements shall be made in accordance with the ordinance
authorizing the annual or supplemental appropriations without the prior approval of the
sanggunian concerned.
RULING:
To uphold the assailed Decision would allegedly give the local chief executive unbridled
authority to enter into any contract as long as an appropriation ordinance or budget has
been passed by the sanggunian concerned.
Sec. 306 of R.A. No. 7160 merely contains a definition of terms. Read in conjunction with
Sec. 346, Sec. 306 authorizes the local chief executive to make disbursements of funds
in accordance with the ordinance authorizing the annual or supplemental appropriations.
The "ordinance" referred to in Sec. 346 pertains to that which enacts the local
government units budget, for which reason no further authorization from the local
council is required, the ordinance functioning, as it does, as the legislative authorization
of the budget.17

To construe Sections 306 and 346 of R.A. No. 7160 as exceptions to Sec. 22(c) would
render the requirement of prior sanggunian authorization superfluous, useless and
irrelevant. Yet, this is obviously not the effect Congress had in mind. The requirement
was deliberately added as a measure of check and balance, to temper the authority of
the local chief executive, and in recognition of the fact that the corporate powers of the

local government unit are wielded as much by its chief executive as by its council.18
However, as will be discussed later, the sanggunian authorization may be in the form of
an appropriation ordinance passed for the year which specifically covers the project, cost
or contract to be entered into by the local government unit.
The fact that the Province of Cebu operated under a reenacted budget in 2004 lent a
complexion to this case which the trial court did not apprehend. Sec. 323 of R.A. No.
7160 provides that in case of a reenacted budget, "only the annual appropriations for
salaries and wages of existing positions, statutory and contractual obligations, and
essential operating expenses authorized in the annual and supplemental budgets for the
preceding year shall be deemed reenacted and disbursement of funds shall be in
accordance therewith."
The items for which disbursements may be made under a reenacted budget under Sec.
323 are exclusive. Clearly, contractual obligations which were not included in the
previous years annual and supplemental budgets cannot be disbursed by the local
government unit. It follows, too, that new contracts entered into by the local chief
executive require the prior approval of the sanggunian.
And so, to give life to the obvious intendment of the law and to avoid a construction
which would render Sec. 22(c) of R.A. No. 7160 meaningless,22 disbursement, as used in
Sec. 346, should be understood to pertain to payments for statutory and contractual
obligations which the sanggunian has already authorized thru ordinances enacting the
annual budget and are therefore already subsisting obligations of the local government
unit. Contracts, as used in Sec. 22(c) on the other hand, are those which bind the local
government unit to new obligations, with their corresponding terms and conditions, for
which the local chief executive needs prior authority from the sanggunian.
The question of whether a sanggunian authorization separate from the appropriation
ordinance is required should be resolved depending on the particular circumstances of
the case. Resort to the appropriation ordinance is necessary in order to determine if
there is a provision therein which specifically covers the expense to be incurred or the
contract to be entered into. Should the appropriation ordinance, for instance, already
contain in sufficient detail the project and cost of a capital outlay such that all that the
local chief executive needs to do after undergoing the requisite public bidding is to
execute the contract, no further authorization is required, the appropriation ordinance
already being sufficient.
On the other hand, should the appropriation ordinance describe the projects in generic
terms such as "infrastructure projects," "inter- municipal waterworks, drainage and
sewerage, flood control, and irrigation systems projects," "reclamation projects" or
"roads and bridges," there is an obvious need for a covering contract for every specific
project that in turn requires approval by the sanggunian. Specific sanggunian approval
may also be required for the purchase of goods and services which are neither specified
in the appropriation ordinance nor encompassed within the regular personal services and
maintenance operating expenses.

SEVERINO B. VERGARA vs. THE HON. OMBUDSMAN, et. al.

[G.R. No. 174567, March 12, 2009]
FACTS:
On 25 June 2001, the City Council of Calamba (City Council), where petitioner was a
member, issued a Resolution which authorized Mayor Lajara to negotiate with
landowners within the vicinity of Barangays Real, Halang, and Uno, for a new city hall
site. On 29 October 2001, the City Council passed another Resolution authorizing Mayor
Lajara to purchase several lots owned by Pamana with a total area of 55,190 square
meters for the price of P129,017,600.[7] Mayor Lajara was also authorized to execute,
sign and deliver the required documents.
Petitioner questioned the lack of ratification by the City Council of the contracts, the
overpricing of lots covered by TCT Nos. 61703 and 66140 in the amount of P19,812,546,
the inclusion of road lots and creek lots with a total value ofP35,000,000, and the lack of
a relocation survey.
On the absence of ratification by the City Council of the MOA, Deed of Sale, Deed of
Mortgage, and Deed of Assignment, respondents explained that Section 22[32] of
Republic Act No. 7160 (RA 7160) spoke of prior authority and not ratification.
Respondents pointed out that petitioner did not deny the fact that Mayor Lajara was
given prior authority to negotiate and sign the subject contracts. In fact, it was petitioner
who made the motion to enact Resolution No. 280
The Ombudsman ruled in favor of Mayor Lajara and held that the various actions
performed by Mayor Lajara in connection with the purchase of the lots were all
authorized by the Sangguniang Panlungsod as manifested in the numerous resolutions.
With such authority, it could not be said that there was evident bad faith in purchasing
the lands in question.
Hence this Petition.
ISSUE:
Whether all the documents pertaining to the purchase of the lots should bear the
ratification by the City Council of Calamba.
RULING:
No.

Section 22(c), Title I of RA 7160, otherwise known as the Local Government Code of
1991, provides:
Section 22. Corporate Powers. - x x x
(c) Unless otherwise provided in this Code, no contract may be entered into by the local
chief executive in behalf of the local government unit withoutprior authorizationby the
sanggunian concerned. A legible copy of such contract shall be posted at a conspicuous
place in the provincial capitol or the city, municipal or barangay hall.
Clearly, when the local chief executive enters into contracts, the law speaks of prior
authorization or authority from the Sangguniang Panlungsod and not ratification. It
cannot be denied that the City Council issued Resolution No. 280 authorizing Mayor
Lajara to purchase the subject lots.

SISON VS PEOPLE
FACTS:
Petitioner Sison was the municipal mayor of Calintaan, Occidental Mindoro, a fourth-class
municipality. When the state auditor conducted a post-audit investigation, it was
revealed that during petitioners incumbency, no public bidding was conducted for the
purchase of a Toyota Land Cruiser, 119 bags of Fortune cement, an electric generator
set, certain construction materials, two Desert Dueler tires, and a computer and its
accessories. The state auditor also found out that there were irregularities in the
documents supporting the acquisitions.
With that, petitioner and the municipal treasurer were indicted before the
Sandiganbayan in seven separate Informations for seven counts of violation of Section
3(e) of Republic Act (RA) 3019.
When asked during the trial, petitioner admitted that indeed, no public bidding was
conducted insofar as the purchases he was being accused of were concerned. When
asked how the purchases were made, he answered that they were done through
personal canvass. When prodded why personal canvass was the method used, he
retorted that no public bidding could be conducted because all the dealers of the items
were based in Manila. Sandiganbayan found petitioner guilty as charged.
ISSUE:
Whether or not the procurement of the said supplies through personal canvass is legal
HELD:
Negative. Petitioner did not comply with the requirements of personal canvass as
provided in RA 7160.
Municipalities :
First Class
First One hundred fifty thousand pesos Class (P150,000.00)

xxx
Second and Third Forty thousand pesos (P40,000.00) Class
Fourth Class and Below Twenty thousand pesos (P20,000.00) (emphasis supplied)
In relation thereto, Section 364 of RA 7160 mandates:
Section 364. The Committee on Awards.There shall be in every province, city or
municipality a Committee on Awards to decide the winning bids and questions of awards
on procurement and disposal of property.
The Committee on Awards shall be composed of the local chief executive as chairman,
the local treasurer, the local accountant, the local budget officer, the local general
services officer, and the head of office or department for whose use the supplies are
being procured, as members. In case a head of office or department would sit in a dual
capacity a member of the sanggunian elected from among its members shall sit as a
member. The Committee on Awards at the barangay level shall be the sangguniang
barangay. No national official shall sit as member of the Committee on Awards.
(emphasis supplied)
Note that the law repeatedly uses the word "shall" to emphasize the mandatory nature of
its provisions.
Petitioner failed to establish that his case falls under those exceptions. Insofar as the
purchase of the Toyota Land Cruiser is concerned, the Sandiganbayan found that the
personal canvass was effected solely by petitioner, without the participation of the
municipal accountant and petitioners co-accused de Jesus, the municipal treasurer.
Worse, there was no showing that that the award was decided by the Committee on
Awards. Only an abstract of canvass supported the award, signed by petitioner and de
Jesus, without the required signatures of the municipal accountant and budget officer.
To reiterate, RA 7160 requires that where the head of the office or department requesting
the requisition sits in a dual capacity, the participation of a Sanggunian member (elected
from among the members of theSanggunian) is necessary. Petitioner clearly disregarded
this requirement because, in all the purchases made, he signed in a dual capacityas
chairman and member (representing the head of office for whose use the supplies were
being procured). That is strictly prohibited. None of the regular members of the
Committee on Awards may sit in a dual capacity. Where any of the regular members is
the requisitioning party, a special member from the Sanggunian is required. The
prohibition is meant to check or prevent conflict of interest as well as to protect the use
of the procurement process and the public funds for irregular or unlawful purchases.
The same flaws attended the procurement of 119 bags of Fortune cement, electric power
generator set, various construction materials, two Desert Dueler tires and a computer
and its accessories. Furthermore, with the kind of items purchased by petitioner, he also
clearly spent more than P20,000or beyond the

RA 7160 explicitly provides that, as a rule, "acquisitions of supplies by local government

units shall be through competitive bidding." By way of exception, no bidding is required
in the following instances:
(1) personal canvass of responsible merchants;
(2) emergency purchase;
(3) negotiated purchase;
(4) direct purchase from manufacturers or exclusive distributors and
(5) purchase from other government entities
Since personal canvass (the method availed of by petitioner) is an exception to the rule
requiring public bidding, Section 367 of RA 7160 provides for limitations on the resort to
this mode of procurement:
Sec. 367. Procurement through Personal Canvass.Upon approval by the Committee on
Awards, procurement of supplies may be affected after personal canvass of at least three
(3) responsible suppliers in the locality by a committee of three (3) composed of the local
general services officer or the municipal or barangay treasurer, as the case may be, the
local accountant, and the head of office or department for whose use the supplies are
being procured. The awardshall be decided by the Committee on Awards.
Purchases under this Section shall not exceed the amounts specified hereunder for all
items in any one (1) month for each local government unit:

threshold amount per month allowed by Section 367 of RA 7160 as far as purchases
through personal canvass by fourth-class municipalities (like Calintaan) are concerned.
Petitioner should have complied with the requirements laid down by RA 7160 on personal
canvass, no matter how strict they may have been. Dura lex sed lex. The law is difficult
but it is the law. These requirements are not empty words but were specifically crafted to
ensure transparency in the acquisition of government supplies, especially since no public
bidding is involved in personal canvass. Truly, the requirement that the canvass and
awarding of supplies be made by a collegial body assures the general public that
despotic, irregular or unlawful transactions do not occur. It also guarantees that no
personal preference is given to any supplier and that the government is given the best
possible price for its procurements.
(Discussion about Section 3(e) RA 3019 violations--not included.pls. refer to the full text)
WHEREFORE, the petition is hereby DENIED. Petitioner Rolando E. Sison is hereby found
guilty of seven counts of violation of Section 3(e) of RA 3019. As such, he is hereby
sentenced for each count of the offense with imprisonment of six years and one month
as minimum to ten years as maximum and perpetual disqualification from holding public
office.

ONG

VS

PEOPLE

FACTS
Petitioner in her capacity as Mayor of Angadanan, Isabela, bought an Isuzu dump truck
for P750, 000.00 for the use of the municipality. With that, a letter-complaint was filed
against petitioner by her successor, and several other Sangguniang Bayan members
before the Office of the Ombudsman, accusing her of malversation of public funds and
property in connection with several alleged irregularities committed during her term as
Mayor of Angadanan, including the purchase of the dump truck for being grossly
overpriced.
She was indicted for violation of Sec. 3 (e) of RA No. 3019, as amended, with respect to
the acquisition of the dump truck.
During the trial, Sangguniang Bayan members and complainants testified that the dump
truck was bought without conducting a public bidding or a resolution by the Sangguniang

Bayan; that the truck was merely reconditioned and not brand new as can be seen from
its deplorable condition, worn tires and old battery; and that a subsequent canvass of
other suppliers showed that better quality dump trucks cost no more than P500, 000.00.
In her defense, petitioner testified that the public bidding and prior Sangguniang Bayan
resolution were dispensed with pursuant to Commission on Audit (COA) Resolution Nos.
95-244 and 95-244-A ]which do not require the conduct of a public bidding on any
negotiated purchase in amounts not exceeding P10,000,000.00; and that the purchase
was allowed by COA because it did not issue a notice of disallowance. However, the
Sandiganbayn found petitioner guilty as charged.
ISSUE:
Whether or not the acquisition of the said dump truck through negotiated purchase is
legal
HELD:
Negative. The contention that the acquisition through a negotiated purchase was valid
the same being pursuant to COA Resolution Nos. 95-244 and 95-244-A, is untenable.
Petitioners reliance on said COA Resolutions is misplaced. COA Resolution No. 95-244 as
amended by Resolution No. 95-244-A states that there is no necessity of prescribing the
limit of purchases not subject to public bidding since Executive Order No. 301 ]authorizes
the heads of an agency with the approval of the Department Heads to enter into
anegotiated purchase as long as the same is advantageous to the government.
Both resolutions are implementing guidelines which must be read and applied in
conjunction with Title VI,Book II, of Republic Act No. 7160 otherwise known as the Local
Government Code of 1991. Section 356 thereof states the general rule that the
acquisition of supplies by the local government units shall be through competitive
bidding. The only instances when public bidding requirements can be dispensed with are
provided under Section 366, to wit:
Section 366. Procurement without Public Bidding. - Procurement of supplies may be
made without the benefit of public bidding under any of the following modes:
(a) Personal canvass of responsible merchants;
(b) (c) (d)
Emergency purchases;
Negotiated purchase;
Direct purchase from manufacturers
threshold amount per month allowed by Section 367 of RA 7160 as far as purchases
through personal canvass by fourth-class municipalities (like Calintaan) are concerned.
Petitioner should have complied with the requirements laid down by RA 7160 on personal
canvass, no matter how strict they may have been. Dura lex sed lex. The law is difficult
but it is the law. These requirements are not empty words but were specifically crafted to
ensure transparency in the acquisition of government supplies, especially since no public
bidding is involved in personal canvass. Truly, the requirement that the canvass and
awarding of supplies be made by a collegial body assures the general public that
despotic, irregular or unlawful transactions do not occur. It also guarantees that no
personal preference is given to any supplier and that the government is given the best
possible price for its procurements.

(Discussion about Section 3(e) RA 3019 violations--not included.pls. refer to the full text)
WHEREFORE, the petition is hereby DENIED. Petitioner Rolando E. Sison is hereby found
guilty of seven counts of violation of Section 3(e) of RA 3019. As such, he is hereby
sentenced for each count of the offense with imprisonment of six years and one month
as minimum to ten years as maximum and perpetual disqualification from holding public
office.